The Purchase and Sale of Financial Instruments Is Not Included

question 23

Multiple Choice

The purchase and sale of financial instruments is not included in calculations of investment spending because ________.

• A)not all of these transactions are reported to the federal government
• B)both foreign and domestic economic agents can engage in the described transactions,but only U.S.economic agents can engage in investment
• C)they do not necessarily lead to a change in the amount of output produced in the United States
• D)they are already including in consumption spending

---

Definitions:

Expired Warrants

Warrants that have reached their expiration date and are no longer valid or exercisable to buy the underlying security at a predetermined price.

Additional Paid-In Capital

The amount of money paid by investors to a company above the par value of the shares during common or preferred stock issuance.

Common Stock Warrants

Common stock warrants are financial instruments that give the holder the right to purchase the issuer's common stock at a specified price before the warrant expires.

Callable

A financial instrument or security that gives the issuer the right to redeem or "call" it back before its maturity date under specified conditions.